top of page

RECEIVERSHIP PROCESS

 

THE RECEIVERSHIP PROCESS:

The main goal of hotel receivership is to secure and stabilize a hotel to protect the value of the asset. This is accomplished by making management and other necessary physical and operational changes to enhance the hotel’s profitability and cash flow, thereby increasing the property’s value. The receiver is not an agent for the lender; it is an intermediate third party hired to protect the property.

 

WHEN IS RECEIVERSHIP A GOOD OPTION?

A receiver is a valuable tool for a lender or special servicer when time is of the essence and the value of the collateral is at risk as a result of not acting quickly. Some lenders believe that this potential damage to the collateral needs to be physical and must be able to demonstrate willful misconduct of the borrower. This is not the case in most jurisdictions and simply illustrating that as an income producing property, any dip in revenue, as a result of borrower indifference, can have a material effect on the value. Additionally, the complexity that is inherent in Franchise Law and Liquor License Law often illuminates the need for the court to act quickly in order to preserve both of those elements. An absentee borrower, even for a short period of time, can dramatically damage the income stream of a hotel.

 

WHAT ARE THE HAZARDS OF CHOOSING THE WRONG RECEIVER?

Choosing an unqualified receiver can have devastating results. More importantly, choosing an inexperienced receiver in hospitality is just as destructive. The idiosyncratic nature of hospitality franchise law absolutely requires best-in-class expertise, and that’s just what our hotel receivership services offer. Here you’ll find an experienced receivership company, as well as experts in the hospitality industry.

 

CONTACT OUR HOTEL RECEIVERSHIP MANAGEMENT COMPANY TODAY. 

bottom of page